Student Loan Forgiveness –
What is It and How Can You Apply?
By now you may have heard the Biden Administration has plans to forgive the student loan debt of college students, both past and present. Student loan forgiveness was one of President Biden’s campaign promises and he has not forgotten that promise. Let’s take a look at who qualifies, what to expect, and how to apply for student loan forgiveness.
Who Qualifies?
If you have student loan debt and you make less than $125,000 for your individual income (or for married couples, less than $250,000), then you are eligible for debt forgiveness. If your household is considered high-income, meaning in the top 5% of all American families, you will not be eligible for this program.
If you are a dependent student, qualification will be determined by the individual income of one or both your parents.
The government has decided that in order to give people enough time to apply and not have any defaults on their loans as they wait, they are extending the grace period for federal student loan repayments. This pause on payments was first implemented during the Covid-19 pandemic, and while they have extended the deadline until December 31, 2022, this will be the last and final time they do so.
What Can You Expect?
If you have determined your individual income meets the criteria for student loan forgiveness, the next question to ask is did you receive a Pell Grant for your schooling? If you did not, you are eligible for up to $10,000 in debt relief. If you did, you are eligible for up to $20,000 in debt relief. However, this is not a lump sum. The debt relief program only pays back what you owe. If you received a Pell Grant for college and have a balance of $12,000, you will only receive $12,000.
In other words, you will not receive more than the amount of your debt. To find out more about student loan forgiveness in general, visit this Fact Sheet on whitehouse.gov or check out this article on studentaid.gov.
How Do You Apply?
As of this writing, applications have not yet opened for student debt forgiveness. However, plans are in the works for the application process to open within 4-6 weeks. If you want to be one of the first to know when applications are open, you can subscribe at ed.gov which will inform you once the program is open for applicants.
However, if the U.S. Department of Education already has your income information, you will receive your student debt forgiveness automatically. If they do not have your income information, you are encouraged to fill an application prior to November 15, 2022 to take advantage of the pause in payments that has been extended to December 31, 2022.
Once applications are open, they’ll remain open until December 31, 2023. However, considering the vast number of applications expected, upwards of several million, you’ll want to be sure to subscribe to ed.com so you don’t miss when applications are open and apply as soon as you can.
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